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Construction Law Reporter


Liability of surveyor – Whether liability confined to losses attributable to additional lending made as a result of a valuation alleged to have been conducted negligently

The claimant instructed the defendant surveyors to value a partly completed residential development which was under consideration by the claimant as security for an advance to be made to the developer. On 4 April 2011 the claimant agreed to advance the developer £2,475,000 for a term of nine months in reliance upon a valuation carried out by the defendant which reported that the development was worth £2,300,000 in its then state but would when completed in accordance with plans be worth about £4.5m. A second facility was entered into in December 2011, the proceeds of which were used to pay off the indebtedness under the first facility and the balance of £289,000 represented new money to be used for the completion of the development. For the purposes of the latter facility, the development was valued at £3.5m with a completion value of £4.9m. The second facility expired in July 2012 but none of the money was repaid. In these circumstances the claimant brought an action against the defendant in which it was alleged that the second, but not the first, valuation had been carried out negligently. The issue before the court concerned the scope of any liability owed by the defendant to the claimant.

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